NE Link: Waste of money

When Infrastructure Victoria called the North East Link a “priority road project”, it was because its consultants gave the road a highly favourable initial assessment. The report last year by KPMG, Arup and Jacobs estimated the project (including the Eastern Freeway and M80 widening) would cost between $4.8 and $7.1 billion. The benefits were stated as $10.1 billion, or $15.3 billion including so-called “wider economic benefits”.

Experts familiar with the modelling that supports these estimated benefits have called it into question. Benefits are based largely on time savings, which real world road projects don’t provide because of the new traffic they generate. “Agglomeration benefits” are also largely illusory because on Earth, dense urban centres and private car travel don’t mix well.

But none of that matters now that Premier Andrews has announced the budget cost as $16.5 billion. Even taking the estimated benefits at face value, the conventional benefit-cost ratio is now 0.6. Not even the mooted “wider benefits” get the ratio up to 1, meaning we’re looking at another colossal waste of Victorians’ money.

I’m sure Infrastructure Victoria would readily acknowledge that when assumptions change, so do the conclusions.

Tony Morton, president, Public Transport Users Association

published in The Age, 27/11/2017

You may also like...